Sunday, February 12, 2006

Peak Oil -- Fact or Fiction

We went to see the documentary called, The End of Suburbia," a couple of weeks ago. Even if only half of what they say in this movie is true, there were reasons for concern and a reason to modify our consumption habits. I received this wonderful cartoon parity of about the greed of the Oil executives called, "Exxon Toast the Planet." This is a good add on to the message of the documentary.

The debate goes like this: if we just cut our oil consumption by replacing 10% of our energy needs with renewable sources of energy, we could slow global warming. If we continue consuming at our current levels we are heading for the edge of a cliff and we won't be able to stop once we realize it is upon us.

Some say the PEAK has already happened, some say it is the near future, while others say it is a long way off. Anyway, I posted the artice in the comment section. See for yourself what they are saying.

With booming growth in China and India absorbing oil, attention has been focused on the effect of rising demand in pushing up oil prices. The Group of 8, a club of the world's richest capitalist democracies and Russia, meeting Saturday in an icy, mist-covered Moscow, focused instead on the extremely tight supply around the world.

"We're all concerned about the risk of rising energy prices and what they do to global growth," John W. Snow, the United States treasury secretary, said after the meeting at a hotel.

The solution for a world parched for oil, he said, would come in market mechanisms to open oil producing regions to investment and more transparent energy deals, and improving ties between producing and consuming countries.

The ministers called for greater accuracy on the part of oil exporting nations in reporting reserves and production figures, according to a statement by the ministers. They also called for greater investment in exploration and pipelines.

Yet the one-day meeting, the first under the chairmanship of Russia, which is pushing the theme of energy security, ended without setting any major new agenda for world energy trading.

The ministers issued a statement that made vague promises about "enhancing the global energy policy dialogue between oil producing and consuming countries and the private sector."

The ministers met in the National Hotel, a shimmering white and gold Art Nouveau landmark a few hundred yards from the Kremlin.

Overshadowing the meeting was European alarm over a brief natural gas embargo Russia imposed on Ukraine early this year, ostensibly because of a dispute over pricing and transit fees. The embargo raised the threat of shortages in Europe.

Peter Westin, the chief economist at MDM Bank in Moscow, said Russia's economic officials were in a defensive mood going into the meeting because of the Ukraine energy dispute, undermining Moscow's proposals on debt and energy security.

"Russia started off the year on a very bad foot," Mr. Westin said.

Oil-importing countries, including the United States, would like to see producing nations increase supplies on world markets, easing prices even as China and other quickly developing economies burn more oil.

A recent jump in Russian oil production — by 10 percent or more a year at some companies — compensated for growth in Chinese demand early this decade. But overall supply is expected to grow only about 2 percent next year.

Still, Aleksei L. Kudrin, Russia's finance minister, said he pushed Moscow's approach to global energy policy, which calls for consuming countries to diversify supply away from the Middle East, in part by leaning more heavily on Russia's reserves in the Arctic and Siberia. He said this would lower prices by reducing the cartel power of OPEC members.

The ministers agreed to work though international groups to bring "necessary investments in exploration, production, transportation and refining capacity, as well as to improve energy efficiency," according to a statement signed by ministers from the eight countries — Japan, Germany, Italy, France, Britain, Canada, the United States and Russia.